Oil Search lifts guidance

PNG LNG: Project lifts guidance and drops costs

Australia’s Oil Search has increased its 2014 production guidance from the Papua New Guinea liquefied natural gas project on the back of early sales.

Previously guidance was set at between 8.1 million and 10.6 million barrels of oil equivalent from the project each year.

This has been increased to between 10.5 million and 13.2 million boe for the year.

Both trains of the ExxonMobil-operated PNG LNG project started up ahead of schedule in April and May, respectively.

Total production guidance across the company has increased from between 14.5 million and 17.5 million boe to between 17 million and 20 million boe.

Oil Search managing director Peter Botten said the first LNG cargo arrived in Japan on Tuesday, a major milestone for the project.

The shipment was received by Tokyo Electric Power.

“Reflecting the largely fixed cost base of the Project, the increase in production has resulted in a downward revision to our forecast per barrel cash operating costs,” he said.

Operating costs for the year were also lower with normal cash opex dropping from between $21 and $26 per barrel to between $18 and $22 per barrel.

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